The price of diesel in Europe fell sharply on Friday morning as European countries considered releasing 50mn barrels of diesel in response to days of political pressure from the Trump administration. The continent’s benchmark diesel futures contract fell as low as $1364 a tonne, the equivalent of about $185 a barrel, in a near 6 per cent drop, as traders anticipated that European leaders would take action following a G7 leaders meeting on Friday afternoon.
Trump has asked Europe to release at least 100mn barrels of diesel to the markets, according to two diplomats familiar with EU discussions, and threatened to ban US diesel exports if the continent does not comply. The EU is considering a French counter-proposal in which European countries release 50mn barrels of diesel, the diplomats added. Members of the International Energy Agency would also release an additional 50mn barrels of crude.
However, talks are ongoing ahead of the G7 meeting and leaders have not yet decided how much of each will be released. Trump’s insistence that Europe unlock its diesel reserves comes as he faces increasing political pressure to bring down high prices for US drivers in the run-up to November’s midterm elections, which will determine control of Congress.
Source: Financial Times Markets · Summarized by HeadlinesBriefing